Circuit Court Rules Employers Must Pay for Rest Breaks

Most employers provide rest breaks for workers throughout the day. But should they pay employees for break time spent away from job duties? The Third Circuit Court of Appeals ruled they should in a case that has no precedent and sets a standard for interpreting an important part of the Fair Labor Standard Act (FLSA).

The first Circuit Court case of its kind, U.S. Department of Labor v. American Future Systems Inc. et al., addresses how companies interpret and enforce the FLSA in relation to work breaks. American Future Systems employees sell business publications over the phone. Company sales representatives were permitted to take breaks at any time, for as long as they wanted, as part of the companies “flex time” system.

However, employees who logged off their computer for more than 90 seconds were not paid for breaks. Employees who took breaks to get coffee, use the restroom, or stand up and stretch were not paid if those activities took longer than a minute and a half. The company’s employees were paid for an average of five hours per day, at minimum wage.

The Department of Labor sued the company, citing a section of the Fair Labor Standards Act (FLSA) referencing rest periods. This section essentially says rest periods lasting between 5 and 20 minutes are considered part of the workday and should be paid. The District Court agreed. They argue the company’s “flex time” policy forced employees to choose between basic necessities like getting a drink or water, and getting paid.

American Future Systems took their case to the Third Circuit Court, asserting the wrong FLSA had been applied. They argued the “off duty” regulation was more appropriate. The company argued that because employees used breaks for their own purposes and were engaged in work duties, they should be considered unpaid, “off-duty” time.

The Third Circuit Court disagreed. The court ruled that the “off-duty” regulation is a general rule and the “rest” section is an exception to that rule. The Court believes the “rest” section applies in this case and sets a precedent for others. This made the FLSA rest regulation a bright-line standard for employers going forward. Employees must pay employees for any breaks lasting 20 minutes or less.

This case is the first of its kind to reach the Circuit Court. Another Circuit Court may interpret the FLSA in another way, and the Supreme Court may ultimately have the final say.

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